Design a control system for controlling the performance of your own subordinates, keeping in view the characteristics of effective controls.

Design a control system for controlling the performance of your own subordinates, keeping in view the characteristics of effective controls. Examine the control methods and strategies used in your organization or any organization you are familiar with. Briefly describe the organization you are referring to.

The control process is a continuous flow, between measuring, comparing and action. '.Controlling is directly related to planning. The controlling process ensures that plans are being implemented properly. In the functions of management cycle - planning, organizing, directing, and controlling - planning moves forward into all the other functions, and controlling reaches back. Controlling is the final link in the functional chain of management activities and brings the functions of management cycle full circle. Control is the process through which standards for performance of people and processes are set, communicated, and applied. Effective control systems use mechanisms to monitor activities and take corrective action, if necessary. The supervisor observes what happens and compares that with what was supposed to happen. He or she must correct below-standard conditions and bring results up to expectations. Effective control systems allow supervisors to know how well implementation is going. Control facilitates delegating activities to employees. Since supervisors are ultimately held accountable for their employees' performance, timely feedback on employee activity is necessary.
Answer to the posed question i.e., "Whether we need any control system when every thing is going as
planned?", can be well illustrated with an example and another question - Can we leave the steering,
brakes, accelerator (Controls) while driving a car given that we are driving in right side, tight direction,
right speed (as per our plan)? The answer would certainly be a big NO. Because, we do not know the
road conditions ahead, the level of incoming traffic, speed and driving style of our co-traffickers and so
on.
How over structured/mechanized may be the operation and even though everything is going as per plan,
we need to exercise control. Because control is 'a continuous process. Control aims at achieving
"everything should be as per plan till the achievement of final object!ve(s)."
Of course, degree of control depends on nature of job, risk associated with deviation from standard,
control design, etc. For instance, in the example that we cited (car driver), the frequency of control is
continuous, because the risk associated with deviation of speed, side, etc., the control design, such as
accelerator is such that a little deviation may lead to an accident.
On the other hand, if a salesman is assigned with a target number of sales per month and the control
mechanism is dispatch of all invoices at the end of the day, the manager in charge can afford to wait till
evening when he receives the report about the day's sales. In other words, relative to the car driver, who
has to constantly apply the control mechanism, manager in question can relax 6rj the weekend and can
wait till the next working day to see the reports concerning each day's sale.
Secondly, since control is a feedforward mechanism, even though everything is going as per plan, we
need control mechanism.
In the following control system designed to control the performance of my subordinates, an attempt has
been made to incorporate all the characteristics of effective control such as plan, structure,
appropriateness, strategic purpose, acceptability by the two salesmen, objectivity and cost
effectiveness.
(a). Plan : Assuming myself to be the Marketing Manager of a readymade garment manufacturing
company which manufactures only two products - T-shirts for gents and suits for ladies. We have

information that last five years average sale in each of the two products have been, say 18,000 units
each.
(i). Target Setting : I would call my two salesmen (subordinates) for target/objectives setting and
facilitate in an MBO framework to set annual sales in each category. Supposing if they set a target of
18,000 + 10% = 19,800 units in each category. Now this can be broken down into monthly target of
19,800/12 = 1,650 units, Weekly target of 380 units (approx) and Each day's target of 66 units
(assuming 25 working days in a month).
In order to motivate and make their work rewarding I would also prefer to introduce incentives into this
control mechanism so that they voluntarily submit it in time and strive to achieve the set target.
Hence, the incentive will be calculated as follows :
If monthly sales > 1,650 units then incentive = (Actual sales -1,650) x 5% = XYZ
Hence, for our control mechanism :
Standard: The Daily, Weekly and Monthly sales target is set at 66, 380 and 1,650 units.
Measurement: The Weekly/Monthly sales will be measured.
Corrective Action: If the Monthly sales are > 1,650 units, Print a congratulation or appreciation letter,
calculate monthly incentive as per the plan and send it to the concerned salesman. If the Monthly sales
are < 1,650 units, calculate the shortage target, set current months' target = 1,650 units + Last months'
shortage target. Print an encouragement letter and the current months' target and send it to the
concerned salesman.
In order to facilitate encouragement, motivation and reduce indirect control the two salesmen may be asked to meet with me before cease work.
Assumption : Manufacturing is not a constraint and the organisation aims to maximise profit and thus,
on the line of organisational objective the Marketing Division's objective is to maximise the sales. To
keep things simple, we keep price constant.
(b). Structure : Having the set annual target, and broken down it into monthly, weekly and daily targets
(which are also communicated to salesmen, understood by them and obtained their consent), I would
ask the two salesmen to send their Daily, Weekly and Monthly invoices. This will work as control tool.
The two salesmen will be directly reporting to me.
As regards control methods used in LKG India Ltd., following are the partial control system used.
General Data Processing Controls : General data processing controls apply to the entire data
processing function.
They cover such topics as:
• Data Center Operations: data entry, processing, distribution and protection
• Access Security Controls: data security

• Systems Software Controls: controls over the scope and procedure for systems
development, acquisition, implementation and maintenance
General data processing controls do NOT include the internal controls that affect only the application within which they are found.

1. Data Center Operations
(a). Data Entry Controls
Data entry controls ensure that as few errors and omissions as possible contaminate data entering the
system. Data entry controls include:
• Source Data Controls
• Input Validation Controls (Edit Controls)
(i) Source Data Control -- check accuracy and completeness at data 'entry
• self-checking digit - numerical function of other digits in the number
• well designed documents - all needed information is included and organized in a
logical way
• sequentially prenumbered forms - e.g. prenumbered checks
• turnaround documents - e.g. the form you send in with your phone bill payment
(ii). Input Validation - also called "edit controls"
• Sequence check - numerical or alphabetical order
• Field or form check - Proper type or class of data (numeric vs. alphabetic), category, or length (social security number must have 9 digits)
• Validity check - already authorized account number e.g. customer number exists in customer master file
o select from a list - e.g. list box or combo box in Access
o self-check digit check - check to see if item entered is consistent
• Limit or range check - does not exceed limit
o Statistical - range set by using a measure of standard deviation
o Sign check - appropriate arithmetic sign
• Logical reasonableness - debit vs. credit accounts
• Relational or valid-combinations test - entry in one field limits the acceptable entries in a related field
o Redundant data cross-check — enter account number and name, look up account number and cross-check name for match
o Closed-loop-verification - send validated data back to terminal in presumed format, e.g. when account number is entered customer name is shown on the screen.
• Completeness test - check to see if all needed data is there
o Preformat input form - helps to assure all information entered. A well designed form
that mimics the source document can reduce entry errors.
o Prompts - asks questions

• Batch totals - Total amount from small batch (approx. 50) and compare to totals of amount entered - provides quick indication of coding or reading error
o financial totals - checks entered must equal deposit total

o hash totals - sum of account numbers
o record counts - correct number of items entered
o cross-footing balance test - invoice total must match sum of quantity times price each for individual items
(b).Processing Controls These controls minimize processing mishaps.
• correct-file test - makes sure that the right file and the right version of file are used
• unprocessable-transactions procedure - handles incorrect data (e.g. data includes non¬existent customer number)
• transaction log - used to reconstruct destroyed files (i).Online Access Controls
• User number - user authorised to have access only to certain information' (compatibility test)
• Passwords
o Need to shut off terminal if user cannot provide password and/or user number with three attempts
o If highly sensitive system, notify security of possible breech
o Passwords randomly assigned vs. selected by user
o Restrict to authorized commands and data access from the specified user
o Do not display or print passwords
o Modify passwords frequently but not on a regular schedule
• Firewalls- separation of network accessible data and private data
• Check usage patterns for irregularity - hard to do (Expert systems now being used for this)
• Intrusion prevention and detection - fix known operating system weaknesses
• Virus prevention and detection procedures - check files regularly & upgrade software frequently
(ii). Output Controls : These controls ensure that reports reach all those, and only those, intended to receive them.
Verification tests - Tests to see whether accounting controls are being applied during processing - e.g. prints check number on each check that MUST match the prenumbered document
Distribution tests -
• Do not leave reports on desks — must come and pick up, must be on access list Make user sign for completeness of output - should know what report was requested.